WASHINGTON — President Joe Biden on Tuesday signed into law a bill that will provide billions of dollars to boost domestic semiconductor production, including dedicated funding for microchips used by the auto industry.
The bipartisan bill — known as the CHIPS and Science Act, or CHIPS-plus — provides more than $52 billion in government subsidies for U.S. semiconductor research, design and production. Of that funding, $2 billion is designated for the production of mature node, or "legacy chips," used by automakers and parts suppliers.
It also includes a 25 percent tax credit for investments in semiconductor manufacturing through 2026 and invests billions of dollars in science and technology innovation to strengthen economic growth, job creation and national security.
"America invented the semiconductor ... and this law brings it back home," Biden said in remarks Tuesday from the White House. "It's in our economic interest, and it's in our national security interest, to do so."
The Senate approved the bill July 27, and the House passed it a day later.
The bill is a trimmed-down version of legislation previously passed by the Senate and House to address the global semiconductor shortage and other supply chain disruptions. That legislation also sought to improve U.S. competitiveness with countries such as China, Taiwan and South Korea, as well as the European Union, which are all investing in semiconductor manufacturing.
Funding for the CHIPS — Creating Helpful Incentives to Produce Semiconductors for America — Act was included in the U.S. Innovation and Competition Act that was passed by the Senate in June 2021 and in the House's version that was passed in February.
The legislation signed into law Tuesday has been slammed by some critics, including Sen. Bernie Sanders, a Vermont independent, who has called it a "blank check to the microchip industry."
Republican Sen. Pat Toomey of Pennsylvania has referred to the bill as a "corporate welfare handout" to "an extremely sophisticated, profitable industry in the U.S. — semiconductor manufacturing."
Biden, during his remarks, pushed back on the criticism. He also touted recently announced plans by technology giant Intel Corp. and other semiconductor manufacturers to invest billions in chip production in the U.S.
"This law is not handing out blank checks to companies," Biden said. "Today, I'm ordering my administration to be laser-focused on the guardrails that will protect taxpayers' dollars," such as preventing companies from using the funds to buy back stock or issue dividends.